OECD report shows growth in counterfeiting, losses to global economy

The International Chamber of Commerce’s (ICC) Business Action to Stop Counterfeiting and Piracy (BASCAP) initiative has called on governments to strengthen enforcement of intellectual property rights following the release of a new report indicating that trade in counterfeit goods has increased by over 80% in a five-year period.

Published today, the new Organisation for Economic Co-operation and Development (OECD) study-entitled “Trade in Counterfeit and Pirated Goods: Mapping the Economic Impact”-highlights that trade in counterfeit and pirated goods has grown from US$250 billion annually in 2008 to more than US$461 billion in 2013. According to these findings, counterfeit products now represent more than 2.5% of all world trade-including 5% of all imports into the European Union.

“Measures to fight counterfeiting have clearly not been sufficient. If governments hope to stabilize the economy and stimulate economic growth and employment, they must do a better job to support the central role that IP plays in driving innovation, development and jobs.”

The OECD report reiterates a number of trends that have been evident for more than a decade: virtually all brands are being counterfeited, and counterfeit and pirated products originate from virtually all economies on all continents-with China remaining the largest producing economy. It also shows that counterfeiters are improving their logistics networks, manipulating transit routes, exploiting governance gaps and taking advantage of the huge growth in online shopping.

“The criminal networks involved in counterfeiting and piracy are responsive to changes in the marketplace,” said Mr Hardy. “They exploit supply chains and free trade zones and are now taking advantage of the rapid move to online shopping. We hope this report will raise awareness of the urgent need for industry players to work together to ensure that the services of legitimate e-commerce marketplaces, search engines and other online intermediaries are not exploited and to restore consumer trust in online shopping.”

The significant increases in counterfeiting amplifies BASCAP’s concern that the massive infiltration of counterfeit and pirated goods creates an enormous drain on the global economy – crowding out billions in legitimate economic activity and facilitating an illicit underground economy that deprives governments of revenues for vital public services, forces higher burdens on taxpayers, dislocates hundreds of thousands of legitimate jobs and exposes consumers to dangerous and ineffective products.

“We hope this report will send a wake-up signal to government leaders around the world that the trade in fakes is hurting investment, innovation and job creation and puts consumer health and safety at risk,” Hardy said. “Policymakers need to view increased enforcement of IP laws and regulations as an investment – not a cost – in the development of their economies.”